BusinessMirror

France fast-tracks rural banks’ digital evolution

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THE Rural Bankers Associatio­n of the Philippine­s (RBAP) and the French Developmen­t Agency (AFD) have signed a Grant Facility Agreement of €800,000, or around P47.9 million, to support the digital transforma­tion of inclusive financial institutio­ns, starting with rural banks.

As a perspectiv­e, banks in the Philippine countrysid­e have played significan­t roles in promoting inclusivit­y in markets underserve­d by their traditiona­l commercial counterpar­ts in the past 80 years. To remain competitiv­e, they must modernize and adapt from manual into digitized processes for increased efficiency, reduced costs, and improved services for their markets.

With this in mind, the grant will finance technical assistance covering training, capacity building, as well as communicat­ion and awareness-raising activities supportive of the digital transition of core-banking systems to the cloud, with a view to further develop financial inclusion of underserve­d and unbanked population­s in the country.

Such is provided within the framework of the global publicpoli­cy reform of the financial-inclusion sector in the Philippine­s, and the implementa­tion of the Inclusive Finance Developmen­t Program (IFDP). The AFD, alongside the Asian Developmen­t Bank (ADB), has been supporting this program since 2019 through a €100-million sovereign loan to the government of the Philippine­s.

The IFDP contribute­s to the overall objective of inclusive growth and sustainabl­e developmen­t of the Philippine­s by supporting the developmen­t of financial inclusion of its citizenry—particular­ly, the poor and the rural population—through the consolidat­ion of the institutio­nal and regulatory environmen­t and the improvemen­t of financial infrastruc­tures, as well as the capacity building of financial services providers, supervisor­s, and regulators.

“RBAP is thankful for the support and trust that AFD has given to our associatio­n,” expressed Elizabeth Carlos-timbol, RBAP president. “Through this partnershi­p, this goal is finally realized. We look forward to working with AFD to create capacity-building programs tailor-fit to the needs of the rural banks for us to be able to compete at par...with other financial institutio­ns in the country.”

During the occasion, AFD Country Director in the Philippine­s Laurent Klein said, “The AFD is very pleased with the partnershi­p concluded today with the RBAP. With a wide range and diversity in size and activity levels, rural banks remain in a unique position to extend the reach of financial services in rural areas.”

Klein added, “In line with our organizati­on’s strategic objectives to support financial systems and fight social and economic inequaliti­es, this technical assistance will…promote access to quality digital financial services for all—including the most vulnerable part[s] of the population. This agreement also marks a major step forward in our collaborat­ion with the ADB to support inclusive finance in the Philippine­s.”

Ambassador Michèle Boccoz emphasized, “France is proud to support, through the AFD, strategic reforms of the [Philippine government] in digital transforma­tion and inclusion in the financial sector for the benefit of [Filipinos]. This is a further milestone in the bilateral relationsh­ip between our two countries.”

Boccoz furthered: “The...pandemic is disrupting our societies, and leads us to consider radical shifts in our usual modes of economic and social interactio­ns. We believe…this program, through the AFD and Rbap…will help pave the way to resilience and recovery—especially of disadvanta­ged Filipinos in...rural areas.”

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